The HEDIAI Issue (Homeowners, Earthquakes, Damage, Intensity, Acceleration, and Insurance), or should I say the Headii Issue, has been on my mind a lot recently. The issue is a cross-disciplinary one and involves homeowner, geologist, seismologist, engineer, insurance provider, lawyer, judge, and jury. What I want to address here is the need for more cross-disciplinary research and understanding between seismologist, geologist, and engineer for what I consider an extremely gray area between small to moderate earthquakes in Mid-America and the potential for damage to conventional homes. Why is this gray area an issue?

There is approximately $250 billion of homeowner earthquake-insured liability in the seven states of Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri, and Tennessee. This amount could grow to $2 trillion if every homeowner had earthquake insurance. The opportunity for homeowners to file earthquake damage claims against insurance providers arises when they feel an earthquake and notice damage or when they notice damage and are aware an earthquake has occurred.

I believe the average homeowner, including myself, doesn't notice routine damage to his home immediately after the damage has occurred and may never notice the damage unless something brings it to his attention. Such damage can be cracks in a window, concrete floors and walls, or masonry and plaster walls. This damage is usually the result of typical aging effects, settlement, or soil movement. An earthquake brings the homeowner's attention to the damage for the first time, and he believes the earthquake caused the damage. The homeowner then becomes apprehensive about the home's structural and architectural stability. Since the homeowner has earthquake insurance, a claim is filed.

Have you ever gone to a book and tried to find out what magnitude earthquake begins to cause damage to a home? Have we as a seismological and engineering community ever seriously considered this an issue? Have we considered explaining to homeowners the geologic causes of settlement and that it might relate to poor building codes and nonenforcement of codes?

In Earth, by Frank Press and Raymond Siever, Table 17.1 explains that earthquakes having magnitudes between 2.0 and 3.4 are not felt even in heavily populated areas, but are recorded. The table indicates slight damage occurring to buildings only when earthquake magnitudes reach 5.5 to 6.1. The Modified Mercalli Intensity (MMI) scale describes the potential for some plaster cracking at MMI = VI. What is the magnitude of an earthquake that causes an epicentral intensity of VI? The old rule of thumb of M = 1 + (2/3) X MMI gives an M of 5.0. An MMI of VII, where damage is described as slight to moderate to well built buildings, gives an M of 5.67.

If a seismologist can supply the acceleration at the site of interest, then the engineer can easily determine whether the earthquake caused the damage. Engineers know the strength of building materials, so they can determine if the force has probably exceeded the strength. But in reality, unless we are extremely lucky, the only data that are collected from an earthquake in Mid-America are the seismograph records that result in a time, magnitude, location, and depth.

I offer two cases that briefly demonstrate this dilemma. Each case points to the need for a clear understanding of intensity, magnitude, acceleration, and potential damage to homes for small to moderate earthquakes.

Case I. About three years ago I was asked by a homeowner if I would do an inspection of his home to confirm his and his engineer's (structural engineering expert) opinion that damage was the result of earthquakes. He had felt at least one of the earthquakes, described it as almost terrifying, and upon inspection of the home found significant damage. The homeowner had a B.S. degree in an engineering-related field and had read many articles/books on earthquake damage and how and why earthquakes occur. He had also completed an extensive study of the geology of the area and had identified associated faults, one within 100 meters of his home. The insurance company hired an engineering firm to evaluate the damage and concluded the damage was due to settlement. Settlement damage was not covered by the homeowner's insurance policy, and the insurance company refused to pay the claim. The homeowner was suing his insurance company for damages, which he estimated were on the order of 25 to 50 percent of the home's value.

When I inspected the home, one section did look like earthquake damage. The cracking, which was significant, appeared to be the result of horizontal movement of a vertical section of wall, and I tended to agree with the homeowner's engineer. However, further inspection led me to believe that the damage may have been caused by settlement from complex ground movement. The next step was to search earthquake catalogs.

There had been several earthquakes recorded in the area during the time frame of interest, the largest being a magnitude 3.7, with smaller ones being within 10 kilometers of the home. The issue became determining whether there was enough earthquake ground shaking at the home to have caused the damage. In this case all of the multidisciplinary fields mentioned above were involved, including a twelve-person jury. In the end the jury found for the insurance company, but the case was a no-win, no-win situation.

The homeowner was extremely distraught because he really believed an earthquake caused the damage and he was out considerable expense. The insurance company lost because its defense costs were at least ten times the homeowner's original claim. The community lost in allowing homes to be constructed to a lower standard that permitted damage from differential settlement, including slope stability problems.

Case II. Recently I was asked by an insurance company to do an independent review of an earthquake damage claim being submitted by a homeowner. Cracks in the masonry veneer ranged from 2.5 mm to 12.7 mm. On the information provided, the claim could be on the order of 10 to 20 percent of the value of the home. The home had already been evaluated by the insurance company's engineering consultant, who had found no evidence of cracking caused by settlement.

The last portion of the engineering consultant's report reads as follows: "Therefore, it is our opinion that the cracks observed near the northeast corner of the house are associated with some recent phenomena, possibly the recent earthquake. The cracks above the garage also appear to be recent. However, the cracks have formed at locations where you would expect cracks to form due to sagging of the lintel supporting the masonry above the garage door. Since the cracks appear to be recent in nature, and were noticed shortly after the earthquake, it is possible that these cracks also formed due to the recent earthquake."

I was given a time frame in which the supposed earthquake had occurred. When I went to the earthquake catalogs and searched that time interval, I found only one earthquake. It had a magnitude noted as 2.5 at a depth of 5 kilometers for one catalog and 2.9 at a depth of 6 kilometers for another catalog. Come on, seismologists, you have been telling me for years that earthquakes of magnitude 3.0, or less, do not cause damage! When I compared the epicentral location coordinates of both catalogs against the coordinates of the home, I found the home basically sitting on top of the epicenter. So what is the likely damage to a well built masonry-veneer home close to a small earthquake? Is there sufficient geological, seismological, and engineering information based on previous research to make an informed and reasonable decision? What should my report to the insurance company say?

The above examples are samples of a few cases I have encountered in the past three years. Wouldn't it be better if the seismologist, geologist, and engineer had a better understanding of the relationship between damage, intensity, and acceleration for small to moderate earthquakes? If such had been the case, the homeowner in Case I may have never filed a claim or, if the claim had been filed, the insurance company may have paid the claim immediately. In Case II you wouldn't be asked to tell me what my report should say.

We are going to be faced with a dilemma in the future, and we do not have to wait for a magnitude 6.0+ to occur in Mid-America. I believe that when the next 4.5--or maybe 5.5--occurs, there are going to be many homeowners filing claims with their insurance companies for earthquake damage when the damage already existed. This is unfair to insurance companies. This is unfair to homeowners who hope that their insurance provider will repair previous damage. This is unfair to homeowners who did experience earthquake damage, but an insurance company's engineering consultant concludes the damage was due to settlement. This is unfair to the self-insured homeowner because the seismological and engineering community has not clearly articulated risk of damage for small to moderate earthquakes so that a homeowner can make an informed decision about whether to transfer the risk to an insurance provider.

The resulting costs to insurance companies and homeowners from the next event are likely to be significant. The cost to an insurance company to have an engineering evaluation of a potentially damaged home is around twenty times the cost of the annual premium paid by the homeowner. Small cracks in the sheetrock joints of a home require not only patching the crack and painting it, a small cost, but also painting the complete room for the paint colors to match. Significant cracking in brick veneer on one side of a home may require complete removal and replacement of the brick on the total house in order for the brick to match.

To be ready for the next small to moderate earthquake in Mid-America more research needs to be done on relationships. TriNet has developed new relationships between MMI, velocity, and acceleration; however, the spread on the data is an order of magnitude, and there are few data below MMI of IV. In addition, there are still questions about the transferability of such MMI, velocity, and acceleration relationships from California to Mid-America. The Mid-America Earthquake Center now has a project to help quantify the relationship between MMI, acceleration, and velocity. This is a step in the right direction.

Remember that the homeowner is our real client. The employment taxes that homeowners pay fund our research. The seismologist and engineer have a duty to properly inform the homeowner and the insurance industry about earthquakes and earthquake damage, and when asked about a specific case, to provide accurate and reliable information.

P.S. In Case II I had no choice but to recommend that the insurance company pay the claim.